2022 will be remembered for inflation, 2023 will be remembered for recession
Christine Lagarde of the European Central Bank. Rates here could rise to 3.5% in 2023.
The year 2022 will be remembered for two things in particular in the world of economics; inflation which jumped to its highest level in 40 years, and the resulting sharp hikes in interest rates by central banks as they strove to bring price pressures back under control.
A year ago, the expectation was that the rise in inflation experienced over the course of 2021 would prove transitory. The inflation rate in the EU climbed from 0.3% in January 2021 to over 5% by the end of the year. The US CPI rate had risen to 7% at the end of 2021. Though these rates are high, the inflation spike was largely put down to supply chain disruptions as economies re-opened post-Covid. These were expected to be resolved over the course of 2022, with inflation falling back.
